The decisions were approved by an Empowered Group of Ministers (EGoM) on drought, headed by Agriculture Minister Sharad Pawar.
The subsidy on diesel would be shared equally by the Centre and the state governments, Pawar said while announcing the decisions taken by the EGoM.
Pawar said the EGoM approved Rs 1,440 crore to Karnataka, Maharashtra, Rajasthan and Gujarat under integrated watershed management programme.
Another Rs 453 crore would be given under the National Rural Drinking Water Programme (NRDWP) to Maharashtra, Karnataka, Rajasthan and Haryana.
The panel approved release of Rs 38 crore under NRDWP to Karnataka, Rajasthan and Maharashtra.
The EGoM also decided to increase the subsidy on seeds of various crops. The panel also approved waiving import duty on oilmeal cake to increase feed supply.
Stating that 306 districts have received deficient rains and 94 districts got scanty rainfall out of 627 districts, he said sowing area is lower than the last year and there will be some setback in kharif crops.
The contingency plans have been shared with states for 320 districts.